Construction to get underway soon for homeless apartment complex in Moorhead

MOORHEAD-Developers of a new apartment building for the homeless in north Moorhead recently cleared a final financial hurdle that means construction could begin within weeks.Moorhead council members recently approved an amendment to the developer...

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Kim Hyatt
Mar 5th 2017 - 3pm.

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Architect's rendering of the $8.5 million Bright Sky Apartments that will be going up at 3305 3rd Ave. N., in Moorhead.

MOORHEAD-Developers of a new apartment building for the homeless in north Moorhead recently cleared a final financial hurdle that means construction could begin within weeks.

Moorhead council members recently approved an amendment to the developer's agreement for Bright Sky Apartments, 3305 3rd Ave. N., that was required by one of the developer's lenders, Minnesota Housing Finance Authority, before the $8.5 million project could move forward.

A majority of the underground infrastructure work was completed before the winter months after a groundbreaking ceremony in October, said Lisa Rotvold of Beyond Shelter, the Fargo-based nonprofit developer. Now the contractor, Roers' Construction, is assessing the site and weather conditions before starting construction of the three-story, 43-unit building.

The complex, which will have support services for tenants, is mostly funded through government loans, a majority from the Housing Finance Agency, as well as private investments and donations. It will have 22 single-resident units and the rest will be two-, three- and four-bedroom units.

Rotvold said Beyond Shelter anticipates construction to be complete in spring 2018.

Moorhead's Churches United for the Homeless, which owns of the 10-acre property, will operate Big Sky Apartments. It runs a homeless shelter at 1901 1st Ave. N. in Moorhead that's been at capacity for years and has had to turn people away. That is why Bright Sky was considered a need for the community.

The City Council initially opposed the complex when it was proposed in 2014, as did several nearby residents. Council members later reversed their position. Final city approval of the apartment complex took place in July 2016, but Rotvold said recent final financial hurdles needed to be cleared before construction could get underway.

At the time of the groundbreaking ceremony in October, Rotvold said Beyond Shelter was still in the process of closing multiple layers of financing it hoped would happen before Christmas. But project lenders each had their own procedures for underwriting.

"We had to exercise some patience working through the many details with each of them," she said.

The final hurdle was taken care of Monday, Feb. 27, when the city agreed to give the Housing Finance Agency standing ahead of the city if there is a foreclosure on Lot 4, which is the lot the apartments will be built on. In return for agreeing to subordinate to the Housing Finance Agency, the city secured its position by requiring Churches United to provide a letter of credit, a 30 percent deposit of anticipated special assessments and to pay specials on Lot 4 by this fall.

Rotvold said Beyond Shelter was able to agree to these terms because it has funds in its development budget to pay the special assessments as soon as they are certified this fall.

"The city's willingness to agree to this subordination was very important to our ability to move forward with MHFA," she said.

The developer agreement remains unchanged with respect to four other lots, two of which Churches United donated to the city for storm water retention, Rotvold said.